GLOBAL- Corporate defaults reached record levels in 2001 with 211 issuers defaulting on $115bn (e129bn) of debt, according to figures released by rating agency Standard & Poor’s. The latest figures dwarf the previous record set in 2000 when 132 issuers defaulted on debts worth $42.3bn.

S&P says 8.6% of issuers with speculative grade ratings at the beginning of 2001 defaulted during the year compared with a rate of 5.7% the year before. “This is by far the highest speculative default rate since the record level of 10.9% set in 1991,” says Brooks Brady, associate director for S&P and author of the upcoming study.

Defaults by telecom companies led the way and accounted for 18.5% of the total number. Brady says that the number of missed payments by telecom companies eased towards the end of 2001 with only half a dozen reported in the fourth quarter.

S&P estimates that the US economy will bottom out in the first quarter of the year and since default rates tend to lag a trough in economic performance by six months, it expects a peak of somewhere around 11% during the summer and a gradual tailing off towards the end of the year.

S&P concedes that in dollar terms, defaults by Southern California Edison, Pacific Gas & Electric and Enron accounted for 20% of the total $115bn.

America registered the most with 162 in 2001 while in Europe the UK led the way with five, Poland three, and one each for Germany, Greece, the Netherlands, Norway and Russia.